FDI provides tight control over foreign operations.
Certain know-how is difficult to convey without FDI.

When entering foreign markets, basic entry choices include

Exporting, licensing, and FDI

Knowledge that can be written down and transferred without losing much of its richness is known as:

Explicit

Agglomeration advantages stem from:

Knowledge spillovers among closely located firms that attempt to hire individuals from competitors.

Industry demand that creates a skilled labor force whose members may work for different firms without having to move out of the region.

Industry demand that facilitates a pool of specialized suppliers and buyers also located in the region.

When one firm enters a foreign country through FDI, its rivals are likely to follow by undertaking additional FDI in a host country to:

Acquire location advantages or neutralize the first mover’s location advantages

Between the 1950s and the early 1980s, the radical view was influential throughout

Eastern Europe, Africa, Asia, and Latin America

____ suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantage by specializing in the production of certain goods or services.

The free market view

Most countries practice:

Pragmatic nationalism

Since the 1980s, countries such as Brazil, China, Hungary, India, Ireland, and Russia have adopted:

FDI-friendly policies

A political view that approves FDI only when its benefit outweighs its costs is known as: